John Weston Smith, finance director, said: 'The idea came from us but it suits both parties. Quantum are assured that we will buy properties we will one day want to own completely. For our part, we get to pick up the whole portfolio if and when we want to and can plan our funding accordingly.'
The agreement, which gave the property sector a huge boost when it was announced in June, envisages British Land and Quantum investing pounds 250m each in UK property over the next four years. The joint fund will also invest a further pounds 500m of borrowed money.
So far the partnership has bought two properties worth pounds 86m, an office block in Edinburgh and a shopping centre in Basildon, Essex. The agreement allows for the whole fund to be fully invested by 1997.
Once that happens British Land will now have the right to buy Quantum out, either as part of a competitive bid or at a price determined by a valuation of the properties. Quantum has the choice. If the venture lasts for 10 years any deal will have to be priced on a valuation of the portfolio.
The deal with British Land represented George Soros's third foray into property this year. In February he tied up a deal with the Reichmann brothers, founders of Olympia & York, the Canary Wharf developer, to invest in property in North America. He also took a 3 per cent stake in Berkeley, the UK housebuilder.
British Land's shares were unchanged yesterday at 358p, almost their high for the year and 60p above the level at which John Ritblat, chairman of British Land, contracted to buy 2 million shares from Quantum. Last September they were worth 110p.Reuse content